Anti-Spiking Provisions of Chapter 32 (for Board Members) November - - PowerPoint PPT Presentation
Anti-Spiking Provisions of Chapter 32 (for Board Members) November & December, 2012 John Boorack Actuarial Associate Public Employee Retirement Administration Commission Chapter 176 of the Acts of 2011 Two anti-spiking provisions
November & December, 2012
John Boorack Actuarial Associate Public Employee Retirement Administration Commission
Two anti-spiking provisions added to Chapter 32 by: – Section 14 of Chapter 176 – amends §5(2)(a) – Section 18 of Chapter 176 – adds §5(2)(f) See PERAC Memo #38/2012
Anyone who: – Retires on or after April 2, 2012, and – Has a benefit calculated under § 5,
Amends G.L. c. 32, § 5(2)(a) by adding the pertinent text:
…[I]f in the 5 years of creditable service immediately preceding retirement, the difference in the annual rate of regular compensation between any 2 consecutive years exceeds 100 per cent, the normal yearly amount of the retirement allowance shall be based on the average annual rate of regular compensation received by the member during the period of 5 consecutive years preceding retirement.
If in the last 5 years of creditable service, the rate of regular
If Section 14 is violated, MUST use the average of the last 5
There are NO exceptions.
Adds G.L. c. 32, § 5(2)(f)
In calculating the average annual rate of regular compensation for purposes of this section, regular compensation in any year shall not include regular compensation that exceeds the average of regular compensation received in the 2 preceding years by more than 10 percent. This paragraph shall not apply to an increase in the annual rate of regular compensation that results from an increase in hours of employment, from overtime wages, from a bona fide change in position, from a modification in the salary or salary schedule negotiated for bargaining unit members under chapter 150E, or in the case of a teacher, from the performance of any services set forth in the third sentence of the first paragraph of the definition of “regular compensation” in section 1. Any withholdings excluded from the calculation of a member’s average annual rate of regular compensation under this paragraph, shall be returned to the member with interest at the assumed actuarial rate.
In determining the 3-year (or 5-year) average of regular
In calculating the benefit, cannot use regular compensation in
If the increase in regular compensation is from one of the
–
Increase in the number of hours worked
–
Overtime wages (not reg. comp. but included in §18)
–
Bona fide change in position
–
Modification in salary or salary schedule negotiated for bargaining unit members of Chapter 150E
–
(For Teachers only) the performance of any service set forth in the third sentence of the first paragraph of the definition of “regular compensation”
In calculating the benefit, cannot use regular compensation in
Any withholdings excluded from the calculation of the member’s
Year pay Avg. Prev. 110% of pay to 2 years avg. use 2012 - $21,000 $21,000 $23,100 $21,000 2011 - $21,000 $15,500 $17,050 $17,050 2010 - $21,000 $10,000 $11,000 $11,000 2009 - $10,000 $10,000 $11,000 $10,000 2008 - $10,000 $10,000 $11,000 $10,000 2007 - $10,000 2006 - $10,000 Average salary would be $13,810 [($21,000 + $17,050 + $11,000 + $10,000 + $10,000) / 5]